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IPCL to invest Rs 350 crore on de-bottlenecking in 2004-05
PTI - Kolkata
Indian Petrochemicals Corporation (IPCL) has chalked out an ambitious Rs 350
crore de-bottlenecking programmes in the second year of operation under reliance
group management.
“We are investing rs 350 crore in various de-bottlenecking programmes in
the coming year to take advantage of the market situation,” IPCL chairman,
Mr Mukesh D Ambani said.
He said apart from Rs 350 crore investment on de-bottlenecking, further expansion
plans were under review. “It is our aim to raise IPCL as one of the most
competitive petrochemical producers in the world.”
Explaining the rationale for investments on capacity expansion, Mr Ambani said
that despite volatile oil markets, the petrochemicals industry globally was
poised for growth.
Additions to global capacities were expected to be less than the demand for
petrochemical products, thus signifying higher operating rates and margins for
petrochemical companies, he said.
“IPCL is well placed to derive full benefit from these favourable trends
on the strength of its scale of manufacturing, integration and market network.
We intend to build on the fundamental strength of the company and expand capacities
suitable at all the three locations to achieve a competitive position in the
international markets,” the IPCL chairman said.
Commenting on the financial performance of the company in 2003-04, Mr Ambani
said it was the first full year of operation of IPCL under the management of
reliance during which focus continuing on improving productivity on all fronts
and enhance overall value for shareholders.
Mr Ambani said during the previous fiscal, IPCL’s turnover increased by
36 per cent to Rs 13,541 crore and net profit for the year increased by 34 per
cent to Rs 273 crore.
“The company’s outstanding debt reduced by Rs 1161 crore during the
year, leading to reduction in interest burden by 25 per cent and as such financials
were put on a solid footing with debt equity ratio at a healthy 1.2:1,”
the chairman said in a letter addressed to shareholders.
The company felt that improving global economies and the high GDP growth rates
projected for the country would lead to growth in consumption of petrochemical
products as despite sustained growth of petrochemical units in the country,
India’s consumption of polymer products still remained very low on a per
capita basis.
“This reflects significant potential for continued demand growth in future
which will be driven by substitution of alternate materials and new product
applications,” the company said.
About the impact of further import tariff reductions, IPCL’s management
discussion and analysis said it was not likely to be high in the future, as
import tariffs on major products have already been significantly reduced compared
to historic levels.
“IPCL currently prices most of its products below the import parity price
levels, which adds to the company’s pricing flexibility in the event of
import tariff reductions,” it said.
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